THE HUSTLE AT AMES

On August 13^, 2011 in Ames, Iowa on the campus of Iowa State University, the nation’s first political test for the Republican Presidential nomination will take place.  It has been billed as “important” and as a “bell weather” event.  Over 250 media outlets are expected to be on hand.

In many ways, the Ames Straw Poll is simple.  The GOP State Central Committee of Iowa has determined that the names of nine Presidential candidates will be placed on the ballot.  This includes the six who reserved space and the three who did not.  The latter includes Newt Gingrich, Jon Huntsman and Mitt Romney.  Missing entirely will be the name of Governor Rick Perry of Texas who has not yet announced.

On the face of it, the Ames Straw Poll would appear to be a slice of Americana with Iowans 18 years of age and older visiting the Iowa State Campus and casting their ballot for the candidate of their choice.  One does not even need to be a Republican to participate.

But upon examination there emerges a much darker picture.  It is not about an open nomination process but rather a shabby large-scale fundraiser for the state party disguised as an exercise in democracy.  Look at the facts:

1-Candidates in order to participate purchase booths in the poll area for a minimum of $15,000.  Ron Paul paid $31,000 for his better location.

2-People desirous of voting must pay $35 per ticket which entitles them to vote, hear the six Presidential candidates who paid, and enjoy a variety of foods and beverages.

3-the Iowa GOP brings in over $900,000 for sponsoring this event.

Further, candidates will buy those $35 tickets for their supporters and they will bus them into the event at no cost.  But there is a huge cost to candidates.  For instance, in 1999, George W. Bush and Steve Forbes spent over $2 million apiece on tickets and activities according to Conservapedia (http://www.conservapedia.com/Iowa_Straw_Poll).   The same source reports that Romney spent up to $1,000 per voter in 2007.

And then we have the attendance factor.  Iowa has a registered voting population of approximately 2 million with the following breakdown:  Democrat – 710,017, Republican – 607,567 and No Party – 772,725.  The total number of people who participated in the Ames Straw Poll in 2007 was 14,302.  That is approximately .7 percent of the eligible registered voting population in Iowa.

Now, others have used words ranging from “shakedown” to “bribery” to describe this process.  There can be no doubt that it is more reminiscent of Al Capone than Abraham Lincoln.

But that is not my point.  The real issue is whether this is the image of democracy that we want to teach our children?  Is this the picture of America that we want to project abroad?

The sad reality is that this ugliness survives because we and the national media assign value to it.   But the truth is that this petty hustle warrants our disdain and little else.

A Budget Correction

Steve Chapman, a respected Chicago Tribune columnist, recently wrote a column praising Tim Pawlenty’s financial management as governor of Minnesota and declared that Pawlenty held the rate of annual spending growth “to less than 1.7 percent”.

That is not accurate.  Here are the final growth numbers from Governor Pawlenty’s office of Management and Budget (Minnesota historical spending growth).  

General Fund

2004-2005                  +5.6%

2006-2007                 +11.9%

2008-2009                  +7.5%

From the same office when you calculate all funds:

2004-2005                 +7.3%

2006-2007                 +8.4%

2008-2009                +11.0%

The state of Minnesota does not prepare annual budgets but rather operates on a 2 year cycle with the fiscal year ending on June 30th of each odd-numbered year.  The final audited budget numbers for Governor Pawlenty’s last budget (2009-2011) are not yet available.

Mr. Chapman may also want to read the annual reviews prepared by Moody’s and their criticism of the heavy borrowing which caused them to downgrade Minnesota’s credit rating under Governor Pawlenty.  Further, it should be noted that property taxes rose $2.5 billion under Governor Pawlenty compared  to $716 million for the prior eight years which was largely due to the shifts to local government.

Happy Birthday George

Years ago, my youngest daughter wrote a grade school paper on the early development of democracy in Greece.  What caught my attention was the part about citizen participation and the expectations of good citizenship.  The emphasis was on giving to the well being of the whole and intelligent participation in civic affairs.

In so many ways, George Pillsbury is Minnesota’s model citizen.  He is always there, always participating, always contributing.

Take a moment and revisit Frank Capra’s marvelous film It’s a Wonderful Life and then think about all the meaningful improvements we have made in Minnesota since the close of World War II.  We became a national showcase for our efforts in education, the arts, business civic participation, human rights, the environment, political governance, etc.  Simply put, Minnesota was recognized as the state that works.

Continuing as a part of this exercise start to think about the impact of George’s involvement.  He and his truly magnificent partner, Sally, have been part of virtually all facets of what defines our quality of life from endowing scholarships at the University of Minnesota to growing the arts.

A war veteran (marine officer during World War II), business leader, philanthropist, and State Senator, George Pillsbury has always represented the best in Minnesota.  And he does it with grace, intelligence, and a deep sense of decency.

George, thank you for being you.

Happy Birthday!

Susan and Arne

P.S.  Read Lorie Sturdevant’s recently released book entitled The Pillsbury’s of Minnesota.  It is very well done.

A ROSE IS A ROSE…

As we head into the final days before a state government shutdown, there will be increased proposals for settlement and more speculation on what will likely transpire.  The June 22nd Star Tribune contained an interesting editorial essentially suggesting that the healthcare provider tax be increased and that this increase be regarded as a surcharge and not labeled a tax increase thereby saving face for legislative Republicans.   Ultimately, this surcharge would produce some $600 million in new revenue which would come from state providers and the federal government.  The benefit would not only be the additional money but, more importantly, the preservation of MinnesotaCare and keeping some 85,000 to 140,000 people on the insured rolls.  Further, it would prevent thousands more from being disenrolled from Medicaid.  Overall, it is a huge step forward.

However, relative to the overall settlement it still leaves the Republicans and the Governor approximately $1 billion apart.

In terms of politics, the editorial is disturbing.   Allowing disagreements to be settled in a way that saves face is as American as baseball and the hotdog.  But saving face is considerably different than the perpetuation of a fundamental untruth.

It has to be said once and for all that a variety of taxes were increased under Governor Pawlenty and no amount of camouflage can mask that realty.  As a matter of fact his “borrowing” of some $400 million from the health care access fund has helped precipitate this crisis.

 In addition, the current Republican budget proposals contain some $400 million in property tax increases (http://www.scribd.com/doc/55548698/5-16-11-Compromise-Budget) on top of a variety of other cost increases.  It should also be noted that Republican legislators (Sen. Julie Rosen-Fairmont and Rep. Morrie Lanning-Moorhead) are the authors of legislation to provide public funding for the building of a Vikings stadium in Ramsey County.  This increase in the sales tax in Ramsey is a tax increase just as Pawlenty’s support for a Twins stadium was a tax increase in Hennepin County.

It should also be remembered that when oil company executives testified in Congress against the removal of public subsidies for oil, many Republican leaders declared that any withdrawal of subsidy funding would constitute a tax increase.  If that is to be the case, then what about the thousands of Minnesotans thrown out of healthcare and told to go on “vouchers” to pay for policies that are beyond the financial reach of low-income people?   Is that not a tax increase?  How about the student losing state support from institutions of higher learning and having to pay higher tuition?  And what about the rest of us who will pay higher healthcare premiums to accommodate the costs of the uninsured receiving emergency care?  One must also add to this list of growing tax increases the likely wage losses that would be suffered by public and private sector employees who are laid off as a result of the shutdown.

Frankly, this debate could use a lot more honesty and far less propaganda.  The bottom line is that both budget proposals contain revenue enhancements or tax increases.   It is not a question of labeling, it is a question of who pays and how

TRAPPED BY THE PAST

National and state media have been uniformly critical of Governor Pawlenty’s failure to confront Governor Romney on health care in last Monday’s debate.  Well, make room for a dissent.  I would contend that Pawlenty had no choice but to avoid any mention critical of Romney’s Massachusetts plan.

It appears from a recent blog by Jo Loveland (http://thesamerowdycrowd.wordpress.com/2011/06/02/the-beginning-of-the-end-for-pawlenty/) that on November 14, 2006, Pawlenty was effusive in his praise of Romney declaring he is an unbelievably bright and nimble and gifted public policy leader.   He went on to endorse mandated universal health care coverage by declaring:  In Minnesota, as to the access issues, I believe we should move toward universal coverage.  Everybody should be in a health plan of some sort.  How we get there becomes important.  I think a mandate by itself is potentially helpful, but it’s not the answer by itself.  Pawlenty seems to be suggesting that we should go beyond mandated coverage.   Loveland also wrote that this tape was likely making the rounds into Iowa and, hence, available to both Romney and Michele Bachmann.

This again has Pawlenty tripping over his past.  On Sunday, during his FOX appearance, he felt comfortable going against Romney and linking his health care plan to Obama’s.  I suspect he thought the 2006 comments would not come to the public’s attention.  After all, that position had been expressed more than four years ago and well before the national emergence of the Tea Party movement.  He also was probably not aware that Minnesota blogger, Andy Aplikowski, had a tape recording of his 2006 sentiments about Romney.

Had Pawlenty launched his attack on Romney’s healthcare plan, it is possible that Bachmann would have retaliated with an instant right that would have put Pawlenty on the canvas and, possibly, out for the full count.

Bachmann’s candidacy now prevents Pawlenty from being able to gloss over his Minnesota record and his numerous position changes including global warning, cap and trade, gay rights, deficits, light rail, and mandatory health care, etc.

By trying to be acceptable to all groups within this right-wing coalition, Pawlenty may be finding his tendency toward philosophical flexibility a serious, if not fatal, hindrance.

Can We Learn From The Past?

Over the past year, we have lost two of our finest business and community leaders:  Win Wallin and “Pinky” McNamara.  Their lives were similar in that they rose from modest circumstances, were enormously successful in business, and gave generously to create opportunities for others.  They dearly loved Minnesota and fully embraced the University of Minnesota.

Perhaps as we look at the current budget impasse, we can learn from them.  They knew how to put together a deal and make everyone feel good about it.  This was due to their ability to see opportunity when others could only see failure and to turn disadvantage into success.  Why not apply this attitude toward our state budget.

Since Wallin and McNamara understood the value of opening doors for the young, it may be well for the ultimate budget to do the same.  This vision covers wider concerns from education to creating an innovative growth-oriented economy.

Why not broaden the current debate from taxes (both party budgets call for sizeable tax increases but disagree on who pays) and focus instead on growing our economy and maximizing opportunities for the young.

Imagine bringing together community, academic, and business leaders in the mold of Wallin and McNamara and working towards an agreement that represents opportunity rather than political advantage?

After all, it was this focus that gave us these two remarkable men.

THE PRESIDENCY: A BIT SHORT IS PAWLENTY

One thing is certain about Monday’s Presidential announcement by former Governor Tim Pawlenty:  he will not bring up the fact that he presided over one of the larger tax increases in Minnesota’s history.  Yes, that is quite correct.

During his two terms as Governor, property taxes rose a stunning $2.5 billion – more than the previous 16 years combined (see note below).

To further amplify this enormous growth consider this fact:  in the 8 years prior to Governor Pawlenty, property taxes rose some $716 million.  Compare this to the $2.5 billion increase during the Pawlenty years.  That is an approximate 250 percent increase.

But this data also illustrates the close relationship between state and local spending in Minnesota.  All too often, state budget cuts simply translate into increased local costs.  This is particularly true when considering school financing and local government aids.

It would be a bit akin to President Obama announcing that he will cut federal funding for highways.  This would reduce the federal budget by over $40 billion and may produce some solid conservative sound bites.  But, unfortunately, the cost of those highways does not disappear.  Rather, it will show up in strained state and local government budgets.

Without reform, spending cuts all too often reappear as cost increases elsewhere.  The sad and tragic reality is that this is what happens when politics and simple slogans become the prime concern rather than quality long-term budgeting.

Further evidence of this can be seen in the fact that from 2003 to today, Minnesota has been rolling from deficit to deficit and in spite of warnings from Moody’s concerning the folly of short-term fixes, Governor Pawlenty continued to achieve budget balance by employing the following:

➢ Borrowing over $1 billion from the tobacco settlement – money designated for health care.
➢ Taking over $2 billion from the federal stimulus funds.
➢ Borrowing over $1.4 billion from K-12 education funding.
➢ Borrowing over $400 million from the Healthcare Access Fund for low-income families.
➢ Accelerating tax payments.
➢ Delaying bill payments.
➢ Engaging in accounting shifts.

In the process, Moody’s lowered Minnesota’s bond rating.

And, much of this activity preceded the recession of 2007 and no borrowed monies have been paid back thereby leaving Minnesota with a $5.1 billion deficit – the 7th most severe in the United States.

It is my belief that the President we elect in 2012 should have compelling leadership skills and a demonstrated background of financial excellence.  This requires not only an appreciation of America’s financial problems but also a willingness to place the nation’s long-term well being ahead of short-term political gains.

Unfortunately, Governor Pawlenty falls short of this expectation.  There is nothing personal in my assessment.  He is smart and pleasant.  I appointed his wife to a state judgeship and I supported his first run for Governor.

However, I come from the more traditional wing of the Republican Party and truly believe in fiscal discipline and that the office of the Presidency should go to our nation’s best and brightest and not its most ambitious.

Note:   Property tax numbers trail by one year – hence Pawlenty’s years total 7 years since the 2011 figures are not yet in.